Discoms in face-off with NTPC over coal quality

New Delhi: Delhi's power distribution companies are headed for a face-off with the National Thermal Power Corporation (NTPC) over the price of the power supplied to them. BSES Yamuna, BSES Rajdhani and Tata Power Delhi have filed a petition with the Central Electricity Regulatory Commission in which they have claimed that NTPC is charging them more for the coal than its low quality warranted, with the excess paid being "up to Rs 3,000 crore". NTPC has refuted the allegations, but admitted concerns over the quality of the coal supplied.

The NTPC plants at Badarpur and Dadri supply around 1,500 MW of power to Delhi. These thermal plants use coal supplied by Coal India Limited. According to the petition, the coal supplied to these plants is stated to have a calorific value of around 5,000 kcal, but the power generated is equivalent to that produced by combusting a lower-grade 3,000-kcal coal. This is contrary to norms, where slippage in coal quality permitted is just 100-150 kcal.

"The payment made to Coal India by NTPC is for 5,000 kcal coal, but the actual power produced from it is of much lesser value. This is primarily due to the fact that the coal is of poor quality and lesser calorific value. However, payment is being made by NTPC to Coal India for higher calorie coal and the same is subsequently charged to consumers of Delhi via the discoms," claimed the three distribution companies.

In view of this, the discoms requested that CERC to restrain NTPC from charging excess energy rates that are higher than the cost of coal and also allow the refund of excess already paid by the discoms since April 1, 2014.

In its response to CERC, NTPC refuted allegations that it had charged excess energy charges and termed the move by the discoms as a device to avoid their tariff payment obligations under the power purchase agreement between them. NTPC said it had no control over the quality of coal being used in the two power plants as it was supplied directly by Coal India. "Cost of any slippage in the grade quality of coal between the loading point and sites of NTPC's generating stations is to be borne by the beneficiaries such as the petitioners," NTPC pointed out.

However, NTPC admitted awareness of the problem of grade slippage and said it had discussed third-party sampling of coal, to which Coal India had agreed. "At NTPC's behest, a high level committee has been set up by the power ministry to address the issue and arrive at a lasting solution," its response stated. The company said it too would like to ensure proper pricing of coal to reduce the cost of generating power.